INSURANCE/HEALTH: Provides relative to formulary placement and cost-sharing requirements for certain generic drugs and biosimilars (EN NO IMPACT See Note)
HB 870 creates new requirements for health insurance issuers in Louisiana regarding coverage of certain generic drugs and biosimilars. If a generic drug or biosimilar is newly marketed and has a lower wholesale acquisition cost than its reference drug or reference product, insurers that already cover the brand-name or reference product must place the lower-cost alternative on the formulary immediately, on a more favorable cost-sharing tier. The bill also prohibits insurers from using prior authorization, step therapy, or other coverage limits that would make access to the generic or biosimilar harder than access to the reference drug, and it bars pharmacy restrictions that would do the same.
The bill allows insurers to use a net-cost calculation instead of wholesale acquisition cost when deciding formulary placement, but requires notice to the insurance commissioner and detailed reporting on pricing, rebates, and cost-sharing comparisons. The commissioner must produce an annual report summarizing these notifications and analyzing the impact on patient costs. The bill also amends the Public Records Law to make information collected under this section confidential and exempt from disclosure, treating nonpublic data as trade secret and proprietary information.
In practical terms, the bill affects health insurance coverage rules, pharmacy benefit management practices, and the way insurers evaluate drug placement on formularies. It is aimed at improving access to lower-cost generic drugs and biosimilars and potentially reducing out-of-pocket costs for enrollees, while also preserving insurer flexibility to consider net costs and rebates in formulary decisions.
The overall sentiment around the bill appears strongly favorable and noncontroversial. It passed both chambers unanimously, with no recorded dissenting votes in the House or Senate, and later cleared a conference report and final adoption without opposition. The vote history suggests broad bipartisan support for measures that encourage use of lower-cost prescription alternatives.
There is little visible contention in the available record, but the bill does contain a policy balance that could be debated: it promotes transparency through reporting to the commissioner while simultaneously shielding much of the underlying pricing and rebate information from public disclosure. Any potential disagreement would likely center on whether insurers should be required to prioritize lower-cost generics and biosimilars based on list price versus net cost, and on the confidentiality protections for drug pricing data.
HB 870 adds R.S. 22:1060.9 to Louisiana insurance law and expands the state’s regulation of prescription drug formularies. It requires health insurance issuers to give qualifying lower-cost generic drugs and biosimilars favorable formulary placement and prohibits utilization management tools that would impede access relative to the reference product. It also creates reporting duties for insurers and the commissioner, and it amends the Public Records Law to exempt related pricing and rebate information from disclosure, thereby affecting insurers, the Department of Insurance, enrollees, and drug manufacturers.
The bill’s reception was overwhelmingly positive. It passed the House and Senate unanimously at each recorded stage, including final passage, rejection of Senate amendments, and adoption of the conference report. The absence of recorded opposition indicates broad agreement with the bill’s consumer-facing goal of improving access to lower-cost prescription drugs and biosimilars.
No major opposition is reflected in the votes or available discussion, but the bill’s structure suggests two possible areas of concern. First, insurers may object to being required to place certain drugs on preferred tiers and to limit prior authorization, step therapy, and pharmacy restrictions when a lower-cost generic or biosimilar becomes available. Second, transparency advocates may question the confidentiality provisions, while insurers and manufacturers may support them to protect rebate and pricing information. The main policy tension is between lowering patient costs, preserving insurer formulary discretion, and keeping drug pricing data confidential.